THE POWER OF BEING UNDERSTOODAUDIT | TAX | CONSULTING

PROGRAMME GOVERNANCE

Mike Ward – Consulting Director

Contents

Programmes Context Programme governance 6 elements of governance Three examples of applying the model to programme governance Concluding remarks References

Programmes• Programmes exist within an organisation’s environment

alongside other (non-project and programme) activities. It is a crucial requirement of good governance to differentiate between activities that are geared to ‘running the business’ i.e. operations, from those activities that are designed to ‘change the business’ – namely the projects and programmes.

• Programmes are temporary management structures designed to help organisations achieve specific objectives [APM].

• Programmes deal with outcomes; projects deal with outputs [MSP©].

MSP© is a Registered Trademark of AXELOS Limited

Context – the challenge• Do we really need another layer of

governance?– The project delivers products to time,

cost, scope, risk, quality, benefit– The portfolio ensures that the

prioritised investments (projects and programmes) will deliver the business strategy

– The programme creates the environment (or capability) in which to deliver agreed benefits as defined by the Blueprint

portfolio governance

programme governance

project governance

Programme GovernanceISO

21500• Governance is the framework by which an

organisation is directed and controlled. • Project/Programme governance includes but

is not limited to those areas of organisational governance that are specifically related to project/programme activities

APM • The governance of project/programme management concerns those areas of corporate governance that are specifically related to project/programme activities.

• Effective governance of programme management ensures that an organisation’s portfolio is aligned to the organisation’s objectives, is delivered efficiently, and is sustainable.

• Governance of programme management also supports the means by which the board and other major stakeholders exchange timely, relevant and reliable information

Research has shown that a governance process is at its most effective when all

interested parties are actively involved and can communicate constructively in an open

mannerInstitute of Civil Engineers: Client Best Practice Guide

“Programme Governance is the framework or system through which

programmes are conceived, authorised, controlled and seen to deliver their change outcomes and

benefits”

6 elements of governanceBehaviour and Relationships: • enabling clarity of roles and with it

accountability and incentives to perform; • being clear on stakeholders to be engaged; • engendering collaboration and living the

core values and behaviour.

Control environmentThreats & opportunitiesControl activitiesInformation, measures & monitoringAssurance

Behaviours

and relationships

Is there a shared understanding within the Sponsoring Group of what the objectives of the programme are?

Is the Sponsoring Group fully supportive of the SRO?

Has the Sponsoring Group demonstrated committed to the programme?

Is the programme aligned with the strategic objectives?

Key points on other 5 elements of governance• Provides discipline and structure to the programme, sets the tone of the venture,

and ensures that the baseline and governance rules are in place and understoodControl

Environment

• Identifies the risks and other areas of uncertainty and puts in place mitigating actions to ensure delivery of the agreed benefits (or better)

Threats & Opportunities

• Confirms that the agreed activities, procedures and processes are followed to deliver the desired business outcomes – including reviews and authorisation points

Control Activities

• Provides appropriate and relevant information - a “single version of the truth” which is available, transparent and communicated to those that need it in a timely fashion

Information, Measures & Monitoring

• Ensures that the assurance plan and activities are carried out to provide confidence in the quality of work being done and certainty of the likely outcomesAssurance

Example 1: agreeing the programme lifecycle

Show interfaces to project lifecycle

Example 2: defining the steps•Appoint the key roles•Create the Vision and Blueprint•Define the Programme Organisation

Control environment

•Analyse threats and opportunities•Agree controls and mitigation actions

Threats and opportunities

•Conduct a Deliverability Study•Develop the Programme Management Strategies and Plans•Develop the Business Case

Control activities

•Develop Benefit Map and Benefit Profiles•Establish Benefits Measures and other KPIs•Produce the Programme Report

Information, measures & monitoring

•Agree assurance activities•Confirm proposed delivery option•Confirm the Business Case is viable

Assurance

Example 3: defining the programme IAAP• Review programme objectives and Business Case• Hold interviews with key stakeholders• Assess compliance requirements

Assess the need for assurance

• Identify assurance providers and scope• Review plan for all external activity• Understand reporting lines and measures

Understand the sources of assurance

• Map key risks to sources of assurance• Highlight gaps where additional assurance is required• Consolidate and remove any duplicate activity

Develop integrated assurance map

• Develop the plan to cover totality of assurance required• Document the programme integrated approvals and assurance plan• Circulate internally and to providers of assurance

Develop assurance plan

Concluding remarks• Thee word assurance is used a lot in

everyday language and can mean different things to different people. It is important that everyone involved is clear on what is meant by assurance for their own organisation, and where assurances come from.

• Do we really know what we think we know? Governance provides the framework to find out.

Assurance

Provides Confidence/evidence/Certainty

To Management

That What needs to be happening is actually happening

References1. Managing Successful Programmes (MSP) – AXELOS

Limited

2. Management of Risk (MoR) - AXELOS Limited

3. Managing Successful Projects with PRINCE2 - AXELOS Limited

4. Directing Successful Projects with PRINCE2 - AXELOS Limited

5. Management of Portfolios (M_o_P) - AXELOS Limited

6. A Guide to Integrated Assurance – APM

7. Directing Change – APM

8. Project Management Body of Knowledge 6 th Edition - APM

9. Factors in Project Success – APM

10. UK Corporate Governance Code – Financial Reporting Council

11. A Guide to the Project Management Body of Knowledge (PMBOK Guide) 5th Edition – Project Management Institute

12. Guidance on Project Management (ISO21500) – ISO

13. Improving Infrastructure Delivery – HM Treasury

14. Common Causes of Project Failure 2012 – Cabinet Office

15. Major Projects Approvals and Assurance Guidance – Infrastructure and Projects Authority

16. OGC Gateway Review for Programmes & Projects – Office of Government Commerce

17. Assurance for High Risk Projects 2010 – National Audit Office

18. Initiating Successful projects 2011 – National Audit Office

19. Assurance for Major Projects 2012 - National Audit Office

20. Major Projects Authority: assurance toolkit

Questions and answers?

Thank youfor your timeand attention

Governance of Project Management

Roger Garrini

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APM Governance SIG

APM Governance SIG

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Governance SIG

Objectives Be the UK focus Advance understanding Contribute to good practice Influence national and

international standard making authorities

Influence those operationally responsible

Develop ambassadors and exemplars of excellence

18….in the governance of project management (change)

Activities Engagement – CxO level

as well as APM members Conferences and Seminars Publications Influence of, and

contribution to, standards

Directing Change2nd edition 2011

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Co-Directing Change2007 (being updated)

Sponsoring Change2009

Free to APM members at www.apm.org.uk/memberdownloads

GovSIG Publications

NewAgile Directing Agile Change (being developed)

What is Governance of Project Management /

Change?

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Definitions‘Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined’

Organisation for Economic Co-operation and DevelopmentOECD Principles of Corporate Governance 2004

www.oecd.org

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“Governance of project management refers to the set of policies, functions, processes, procedures and responsibilities that define the establishment, management and control of projects, programmes and portfolios”

APM BoK 6th EditionLinked but separate from Project Governance!(management framework within which project decisions are made and accounted for)

Overall Context

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MissionStrategy & Objectives

Portfolio Mgmt – Definition & Monitoring

Operational Planning & Mgmt

Programme and Project Mgmt of authorisedP&Ps

Operational Mgmtof on-going operations(BAU)

Organisational and External Resources delivering tasks

Vision

Opera

tion

s Gov

erna

nce

Programm

e / Project

Governan

ce

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Governanc

e of Project

Managem

e

nt

Corp

orat

e Gov

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“No such thing as failed projects, only failed governance” Andrew Bragg – Former CEO APM

Main reasons for project failure

are the same as 30 years ago

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“poor performance results in organisations wasting $109m in every $1bn invested in projects”  “high performing organisations successfully complete 89% of their projects, while low performers complete only 36% successfully”

“Fit-for-purpose governance strongly influences project and programme success”  “higher performance is correlated with higher maturity”. “there is a highly visible

disconnect between Executive Teams and Project Managers”

“C-Suite are often missing in action”.

Misalignment of ‘Run the business’ and ‘Change the business’ results in ‘wastage’ of resources

“only 62% of programmes have an established or mature link between programme objectives and organisational strategy and only 50% of the respondents felt that the boundaries of their organisations portfolio were clearly defined and decision making well supported”

“Just 42% of companies reported having high alignment of projects and organisational strategy” “Companies with high degrees of alignment have more successful projects (69%) compares with companies with low alignment (45%)” 

“80% of the projects with active sponsors reported a success rate of 75%, which is much higher than the average”  “actively engaged sponsors is the top driver of project success” 

Sources:2014 PMI Pulse SurveyPwC 2104 Global SurveyPwC 2012 Global SurveyAPM Factors for Project Success 2014GovSIG Benchmarking

“only 38% of programmes had established processes to identify benefits at the outset” “only 20% had robust benefits measurement processes in place during implementation”

“lower value projects are more successful than large more complicated projects”

“of the success factors, ‘delivery to time’ showed the least success”

“62% of portfolios do not have benefits in the sponsor’s personal performance targets”

“Only 57% of sponsors had received sponsor training”

Why is Good Governance important?

Key success factor for project outcomes (from APM Study) Competitive advantage for businesses Provides for internal controls Externally, it reassures stakeholders that their money is

being invested well Good governance is increasingly demanded by

shareholders, government and regulators To comply with external regulations and legislation (e.g.

the UK Corporate Governance Code and Sarbanes-Oxley in the USA).

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Governance of project management

principles

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Directing Change from APM

1. Portfolio direction2. Sponsorship3. PM Capability4. Disclosure and reporting27

Directing Change Principles - 1

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Directing Change Principles - 2

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Requires competent people in every role

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Even if we have “good people” are they fully competent in the project role and “game” that we expect them to “play”?

Sponsoring Change

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Sponsoring Change: A Guide to the Governance Aspects of Project Sponsorship, APM 2009

What would you expect from the project sponsor?

Why does every project need a sponsor?

Separation of Decision MakingObjectives, appointment of the PM, Start/ stop

Oversight of the PM functionChallenge

Accountability for benefitsAfter the project has delivered

Stakeholder ManagementSenior level

Attributes of Successful Project Sponsorship

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Project Sponsor effectiveness = best single predicator of project success or failure

Appoint a named Sponsor early in the project lifecycle

Critical success attributes:1. Support2. Continuity3. Alignment

Personal Attributes:1. Understanding2. Competence3. Credibility4. Commitment5. Engagement

Co-Directing Change

Co-owned Projects

Guidance on• Context• Benefits/pitfalls• Principles• Key Questions

Summary - Effective Governance

Ensure that an organisation’s project/change portfolio is aligned to the organisation’s objectives and is delivered efficiently (maximising value)

Ensure that the organisation is aware of risks, minimises project failures and maximises the beneficial outcomes (value) from their overall portfolio of projects in a sustainable and transparent manner

It also supports the means by which the corporate board and other major project stakeholders are provided with timely, relevant and reliable information.

GovSIG strapline:

“Achieving Change

Successfully with Confidence,

Control and Transparency”

THE POWER OF BEING UNDERSTOODAUDIT | TAX | CONSULTING

CORPORATE GOVERNANCEAPM North West branch AGM

MAY 2016

Corporate Governance

What is corporate governance?

• Corporate governance is the system by which companies are directed and controlled.

• The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent

management that can deliver the long-term success of the company.

• Boards of directors are responsible for the governance of their companies.

• The responsibilities of the board include setting the company’s strategic aims, providing the

leadership to put them into effect, supervising the management of the business and

reporting to shareholders on their stewardship.

Source: UK Code of Governance, Financial Reporting Council, September 2014.

Corporate Governance – Main Principles

Leadership• Every company should be headed by an effective board which is collectively responsible

for the long-term success of the company.• There should be a clear division of responsibilities at the head of the company between the

running of the board and the executive responsibility for the running of the company’s business. No one individual should have unfettered powers of decision.

• The chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role.

• As part of their role as members of a unitary board, non-executive directors should constructively challenge and help develop proposals on strategy.

Source: UK Code of Governance, Financial Reporting Council, September 2014.

Corporate Governance – Main Principles

Effectiveness• The board and its committees should have the appropriate balance of skills, experience,

independence and knowledge of the company to enable them to discharge their respective duties and responsibilities effectively.

• All directors should be able to allocate sufficient time to the company to discharge their responsibilities effectively.

• The board should be supplied in a timely manner with information in a form and of a quality appropriate to enable it to discharge its duties.

Source: UK Code of Governance, Financial Reporting Council, September 2014.

Corporate Governance – Main Principles

Accountable• The board should present a fair, balanced and understandable assessment of the

company’s position and prospects.• The board is responsible for determining the nature and extent of the principal risks it is

willing to take in achieving its strategic objectives. The board should maintain sound risk management and internal control systems.

• The board should establish formal and transparent arrangements for considering how they should apply the corporate reporting, risk management and internal control principles and for maintaining an appropriate relationship with the company’s auditors.

Source: UK Code of Governance, Financial Reporting Council, September 2014.

Corporate Governance – Main Principles

Remuneration and Shareholder EngagementRemuneration• Executive directors’ remuneration should be designed to promote the long-term success of

the company.• There should be a formal and transparent procedure for developing policy on executive

remuneration and for fixing the remuneration packages of individual directors.

Shareholder Engagement• There should be a dialogue with shareholders based on the mutual understanding of

objectives. The board as a whole has responsibility for ensuring that a satisfactory dialogue with shareholders takes place.

• The board should use general meetings to communicate with investors and to encourage their participation.

Source: UK Code of Governance, Financial Reporting Council, September 2014.

Board Tasks

4 key tasks of a Board

1. Establish vision, mission and values

2. Set strategy and structure

3. Delegate to management

4. Exercise accountability to shareholders and be responsible to relevant stakeholders

(Source: Standards for the Board, Institute of Directors)

Board Tasks

Set strategy and structure • Review and evaluate present and future opportunities, threats and risks in the external environment;

and current and future strengths, weaknesses and risks relating to the company. • Determine strategic options, select those to be pursued, and decide the means to implement and

support them. • Determine the business strategies and plans that underpin the corporate strategy. • Ensure that the company's organisational structure and capability are appropriate for implementing the

chosen strategies. • Determine the company's appetite for risk.

Delegate to management • Delegate authority to management, and monitor and evaluate the implementation of policies, strategies

and business plans. • Ensure that internal controls are effective. • Communicate with senior management.

(Source: Standards for the Board, Institute of Directors)

Board Tasks

Set strategy and structure • Review and evaluate present and future opportunities, threats and risks in the external environment;

and current and future strengths, weaknesses and risks relating to the company. • Determine strategic options, select those to be pursued, and decide the means to implement and

support them. • Determine the business strategies and plans that underpin the corporate strategy. • Ensure that the company's organisational structure and capability are appropriate for implementing the

chosen strategies. • Determine the company's appetite for risk.

Delegate to management • Delegate authority to management, and monitor and evaluate the implementation of policies, strategies

and business plans. • Ensure that internal controls are effective. • Communicate with senior management.

(Source: Standards for the Board, Institute of Directors) Further Guidance in APM’s “Directing Change”

Board Meeting 2016

Business as usual meeting

Board Meeting 2017

Forward looking meeting

Strategic Planning – Board role

• Stocktake (including SWOT)

• Horizon scan (including PESTLE)

• Determine direction of travel

• Develop strategic plan and enabling strategies (including people/processes/structures)

• Monitor implementation

• Repeat

Project/Programme Management

Strategy implementation

• Well governed and structured approach which supports delegation of responsibilities• Task and finish groups as opposed to formal Board Committee enshrined in the Articles or

Constitution

• Separates BAU and change activities – allows single focus and discrete resourcing at

operational level and separation of agenda items at Board level

• Provides regular and formal oversight arrangements

• Use established risk based methodologies for effective filtering of key risks/issues

• Provide succinct RAG based reporting (CRaB)

How Project/Programme Management can support Boards

QUESTIONS

AND ANSWERS?

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